The gold market has been pretty back and forth choppy in the early hours here on Monday as we try to determine where to go next after the EU and the United States came together with a trade deal. The 50 day EMA is right here as well. So that in and of itself could cause a certain amount of noise and potential resistance or even support, depending on which way we break. I’d also point out that we are getting close to the inner consolidation area that we have been trading.
And with that being the case, I think a little bit of back and forth probably makes quite a bit of sense. However, if we were to break down from here, the $3,200 level would be a major support level for the bigger consolidation range, which has been in effect for several months. As long as we can stay above the $3,200 level, I think it’s easier to buy dips in the gold market, despite the fact that it has been so choppy and essentially rudderless.
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If we can break the upside clearing the $3,400 level, it opens up a move to the $3,500 level above, which is a major barrier. As things stand right now, we’re in the middle of summer, so I think the volume probably leaves a little bit to be desired. And of course, conviction is probably not quite there either.
However, when you look at the overall attitude of the market, we have been bullish for a very long time. And as such, one has to assume, at least as things stand right now, that nothing’s changed. We are just simply working off some of that excess froth. So, I’m waiting to see what happens with this range, the bigger range that is before putting a lot of money into play, but short-term pullbacks do offer short-term buying opportunities with smaller positions.
Souce: Fxempire
